 The price Concepcion Delgado got for his produce had dropped drastically in two weeks. |
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An average Nicaraguan is no longer able to procure even half of his basic food needs.
Kimmo Lehtonen
Translated by Linus Atarah
Concepcion Delgado had travelled six hours on the river in order to sell his products to retailers at the Bluefields market. No wonder that the oranges offered by the shopkeeper were so satisfying to the thirsty small farmers.
Delgado brought a few 50-kilogramme sacks of quiquisquea tubers similar to manioc which is the basic soup ingredient of all Nicaraguans.
In the Caribbean side of the Island the tuber is always in demand because in the basic food rondon among the Creole population it is simmered in coconut milk together with plantain, manioc, and onions and eaten with tortoise or smoked pork.
- It didn’t go well in the best possible way, says Delgado and spitting out the orange seeds from his mouth.
Two weeks ago he got 23 Euros for a sack but now only 16.
- Someone has brought a large consignment from elsewhere, he suspects. - Up to last year the price had remained stable at around 23 Euros but the price fluctuations during this harvest season have been steep. So one takes home less than what it was two weeks ago.
In the Caribbean Dream Hotel at a corner of the market, receptionist Juanita Clark gives a painful sigh when asked if life has become more expensive during the past weeks.
- Take two of my children with you to Finland I no longer have money to take care of three children, he suggests with a laugh.
- Many foodstuffs have become hugely expensive. And especially milk which is needed in litres right at this moment in an economy like ours, says Clark. - In addition everything is more expensive in Bluefield than in the capital Managua.
A quick tour to the shopkeepers around the corner confirms Clark’s claim. Rice, beans, sugar and many other basic foodstuffs are about 15 per cent more expensive than the Pacific side of Nicaragua. The explanation to that is rather simple: a large portion of the basic foodstuff is imported to the Caribbean side and transport costs alone raise the prices.
Most work is found in the informal sector.
According to World Food Programme’s (WFP) so-called tortilla index, the price of Nicaraguan corn bread rose from 28 cents at the end of 2006 to 50 cents in January 2007. It rose further to 54 per cent in 2008, much more than in other Central American countries.
At the end of 2005 the price of a food basket made up of a collection of 25 basic food items was 2700 Cordoba, according to the Nicaragua Central Bank. In March last year (2008) it was 8 000, i.e., about 270 Euros. According to the country’s social welfare institute (INSS), the average wage is however, only about 180 Euros of which an estimated 46 per cent goes into food.
Thus an average Nicaraguan is capable of procuring about a quarter of the basic food basket. If the statistics are to be believed the change is dramatic compared to the situation in 2001, when an average income could still procure about 70 per cent of the food basket.
The change in the food basket calculation becomes more dramatic when it comes to light that three-quarters of Nicaraguans earn less than two dollars a day. Only about 80 000 wage earners are registered with the INSS. 3.5 million people of the population are in the working age most of who work in the informal sector of the economy.
- In Nicaragua the food crisis has been a reality for a long time. A portion of its population that is undernourished has been known for a long time”, says food security expert Eduardo Vallecillo. He is the leader of GISSAN, a network of over 20 Non-governmental organisations specialised in food security issues based in Managua.
- The causes of the food crisis are international as well as national. The rise in the price of oil has raised production costs everywhere and now we have this global financial crisis whose direct impact on food crisis in Nicaragua is yet difficult to analyse.
The leadership of the World Bank is searching for solutions to this financial crisis. It is also of concern to us here because a solution is being sought to increase the production of basic food and for example, at the United Nations Food and Agriculture Organisation (FAO) there is now talk of a second green revolution.
According to Vallecillo, it means new technology and increase use of genetically modified crop species.
It therefore is equivalent to twice the negative impact of CAF TA-type free trade agreement because large producers and international agribusiness giants have benefited from CAFTA at the expense of small and medium-size producers. The World Bank’s alternative proposal for resolving the crisis would accentuate the trend.
Domestic politics at the forefront
According to the other food security expert Cirilo Otero, the causes of Nicaragua’s chronic hunger crisis are to a large extent due to failures of the country’s governments. Global crisis and the cruel forces of nature that often hits the country such as drought, hurricanes, and too much rain on its part deepens the crisis.
- In Nicaragua the flow of state funds in the form of loans and technical assistance has been for years directed to the export of commodities in the hope of procuring foreign exchange and domestic food production is completely left to the wind.
- The cold mathematical lesson of past governments has been that basic foodstuffs are cheaper to import than produce domestically and that is especially why supermarkets in the cities are full of foreign foodstuffs.
These expensive imported products cannot be procured by farmers with no purchasing power. On the contrary, a large majority of city dwellers are dependent on remittances from relatives abroad, whose annual flow into the country is estimated to be about one billion dollars. It is nearly equivalent to the country’s annual exports.
These family remittances from abroad increases the pace of a vicious circle of non-productivity, because the money goes almost entirely into consumption and therefore increases the demand for imported goods. The money does not go into resuscitating local production. There is no calculation yet on how the US financial crisis would affect the flow of such funds.
The Sandinista government that has been in power for two years has received cautious praise from Vallecillo because resources have been transferred to the countryside in the form of various projects. Their evaluation in terms of sustainable outcomes, according to him, is however, still difficult.
According to Vallecillo, one interesting central target of the Sandista government is improving food security. Projects aimed at food security such as Zero Hunger and micro credit for women known as Zero Interest have targeted at particularly large sectors of the informal economy.
Local food as solution
While thinking about the milk deficit of Clark’s children, a successful co-operative dairy located in Chontales Camoapas in Nicaragua’s cattle region, which some time ago Finnish development assistance funded for 15 years came to mind. Now the dairy is self-supporting and sometimes the demand for milk outstrips the capability of producers to deliver.
- In the last three years production has been in rapid increase. The dairy buys 38 000 litres of milk a day and from that comes 4, 500 kilogrammes of cheese, production Chief Flores calculated in his office a few months ago.
Clark’s children, just like about two million other Nicaraguan children would be consuming moderately affordable daily portion of milk, for instance from the dairy producers of Camopa cooperative, but the domestic market of neighbouring town takes a second place in the competition because cheese from the dairy factory is sold to the US, Mexico and El Salvador for a good price.
Milk producers of the Chontales region are an excellent example of those few producers that have benefited from the CAFTA free trade agreement signed three years ago. IN Nicaragua it improved the export of basic products such as sea food, sugar cane and ethanol produced from it, meat and milk products.
- When considering the development of the country as a whole, the economic model is faulty and has to change”, says Vallecillo. Now small holders are being enticed to sell or rent out their land for the cultivation of sugar cane, i.e., for the production of ethanol not for the production of basic commodities for the domestic market.
According to Vallecillo, the food crisis by its nature is slightly different between city dwellers and those of the countryside. However, the general tendency has been for a long time, in that small producers in the countryside have become rural workers or migrants, and so their social position is parallel to urban wage earners.
- All those – especially the youth from the rural areas – who have moved into the urban areas and for instance, moved to work in the export free zones do not return to the countryside any longer to become small producers. The salaries paid in the export free zones are about half of what it takes to secure a basket of basic foodstuffs and therefore it is difficult for them in terms of food security.
- Food must be produced locally, it is the only solution, Vallecillo believes. - Only then can the living conditions of farmers be secured, local business can keep on running and secure the food security of the whole population.
